This page explains pricing and interest rates for the five different Treasury marketable securities. For information on recent auctions, see Results of recent auctions. Bills are short-term securities that mature in one year or less. They are sold at face value also called par value or at a discount.
When they mature, we pay you the face value. Both bonds and notes pay interest every six months. The interest rate for a particular security is set at the auction.
The price for a bond or a note may be the face value also called par value or may be more or less than the face value. The price depends on the yield to maturity and the interest rate. In both examples, the yield is higher than the interest rate.
Therefore, the price was lower than par value. During the life of the bond or note, you earn interest at the set rate on the par value of the bond or note. The interest rate set at auction will never be less than 0. If you still own the bond after 20 years or the note after seven years, you get back the face value of the security.
They mature in 5, 10, or 30 years. The interesting aspect of TIPS, that differs from bonds and notes, is that the principal goes up and down with inflation and deflation. While the interest rate is fixed, the amount of interest you get every six months may vary due to any change in the principal. To calculate the inflation-adjusted interest you will get, near the time your interest payment is due, follow these steps:. The price of an FRN is determined at auction. The price may be greater than, less than, or equal to the FRN's par amount.
